Late payment 'Hall of Shame'

We have been campaigning against the practise of companies delaying payment to their suppliers for many years. Late payment can have a crippling effect on small firms. The Late Payment of Commercial Debts Act was introduced in 1998 and granted businesses the right to claim interest on late payments. The legislation did not provide a solution for many businesses and we therefore continue to name and shame businesses which make retrospective changes to payment terms, effectively squeezing their suppliers. We have also been lobbying for businesses to sign up to the Prompt Payment Code.

 

To enter a company into the hall of shame, email us at campaigns@fpb.org, including any relevant background information and copies of letters / emails.

 

The most recent companies to be entered into the hall of shame are:

 

Construction company Rok plc has been entered into our Hall of Shame after doubling its standard payment terms for new contracts with sub-contractors and consultants.

 

The 60-day standard payment will apply to all future agreements "which if not refuted in writing within seven days of its receipt will be deemed effected," according to a letter, seen by the FPB, which was sent by a subsidiary of Rok plc to sub-contractors and consultants on 22 June 2009.

 

This comes despite claims that one of its 'core values' is to "improve [its] long term profitability and that of [its] supply chain colleagues." Click here to read Rok's response.

  

 

United Biscuits, the company behind some of the UK's best known biscuit brands, such as McVitie's, Jaffa Cakes and Carr's, is being named and shamed  after changing its payment terms payment terms from 45 to 75 days.  Suppliers were informed by letter but given just one week's notice.

 

The FPB has written to United Biscuits outlining the damage being done to its smaller suppliers, and urging it to sign up to the Government's Prompt Payment Code.

 

Argos
Argos re-entered the Hall of Shame in May 2009 after doubling its payment terms from 30 to 60 days. In addition, it deducts a 4% 'settlement discount' from invoices it pays within that time.

 

We have also learned that Argos is imposing steep 'supplier compensation charges' – fines on suppliers which provide incorrect product details that require changes to its catalogues. 

 

Argos initially appeared in the Hall of Shame in 2005 when it insisted suppliers remained silent about its enforced changes to payment terms, telling them in a letter: "It goes without saying that all discussions that take place between us are confidential. Under no circumstances should any information that is provided to you by us be disclosed by any third party."

 

Other companies which have been named and shamed over the years: